When my parents bought their first home, in 1950... they purchased a small ranch home in Akron, Ohio.
It was 3 bedrooms and 1 bath. It had a modern kitchen with General Electric appliances, and a 1-car garage. It set them back a costly $7,000 at the time. Their monthly payments were almost $60.00 per month, and my mother tells me that they lay awake at night, staring at their newly purchased ceiling wondering how on earth they were going to make those enormous monthly payments.
My mother's parents helped them with occasional payments, (much to my father's chagrin) and helped fill their pantry on occasion.
In 1950, there really weren't any two-income families. So the "husband" was the sole bread earner. Let's break this down.
1) My father's annual income at the time was $7,000. 100% of the cost of the home.
2) His car, at the time, cost $500.00. (7% of the value of his home) Total. It was paid for in full, no car payment.
3) The mortgage was $55.79 per month (9% of his income)
4) Their gas / electric was under $10 per month
5) They had no life insurance, no health insurance, it was a simpler time... doctors made house calls.
6) They had no cable bill, no broadband bill, no central air conditioning, no car payment, no cell phone bills,
7) They had no college fund (we'll figure it out).
TODAY:
1) The average annual income in the united states is $43,318.00 (according to the u.s. census). The average home in the U.S. (depending on region) ranges from $138,000 - $227,000.... averaging 182,000. That means that a home costs over 400% of the average U.S. income. Yikes!
2) According to Motor Trend magazine, the average US car sells in excess of $28,000, that means that that their car costs 15% of the value of the average home. And typically, today, the average family has 2 cars... so really 30% of the value of today's home.
3) The average mortgage payment is $1,019.00, plus taxes, on average of 200.00 per month... for a total of $1,219.00 (a whopping 33% of their income)
4) The average utility bill (gas/electric) runs over $200 per month... and add to that... a huge gas bill for the cars... something our parents didn't have to contend with.
5) Life Insurance, Health Insurance, yikes... we could be talking thousands per month!! Right?! Prescriptions???
6) Cable Bill, Broadband, Cell Phone, Car Payment!!! They're huge these day! yikes... no wonder we need that second income!
7) Here's the one area we are the same as our parents. The average American has ZERO college fund set aside.
ALAN MAY, Realtor®
Specializing in Evanston Real Estate and North Shore Real Estate
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Coldwell Banker Residential Real Estate, 2929 Central Street, Evanston, IL 60201
847.425.3779 Cell: 847.924.3313 Email: Almay@aol.com
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